India-Oman CEPA: Securing Energy Supplies & Expanding India’s Investment Footprint - Key Details

India and Oman are set to sign a Comprehensive Economic Partnership Agreement (CEPA) that covers goods, services and investment. The pact aims to cut tariffs on various products, improve market access and deepen cooperation in key sectors.

Boost to Indian Exports Through Tariff Reductions

According to a report by the Global Trade Research Initiative (GTRI) cited in a report by ANI, the CEPA will help enhance the competitiveness of Indian industrial exports in Oman. Currently, over 80 per cent of Indian goods face an average tariff of about 5 per cent in Oman, though duties on certain items reach up to 100 per cent, including select meats, alcohol and tobacco.

The agreement focuses on reducing or eliminating these tariffs. As per the report, India's exports to Oman reached USD 4.1 billion in FY2025, with top items including naphtha (USD 747.6 million), petrol (USD 561 million), calcined alumina (USD 313 million), machinery (USD 231 million), aircraft (USD 165 million), rice (USD 182 million), iron and steel articles (USD 120 million), beauty and personal care products (USD 128.6 million) and ceramic products (USD 79.9 million).

Strengthening Energy Security for India

The CEPA will reinforce Oman's role as a vital energy supplier to India. ANI reports note that energy and fertiliser imports from Oman, valued at USD 6.6 billion, include crude oil, LNG and chemicals.

These supplies are expected to gain from India's tariff commitments under the agreement, providing greater stability to India's energy imports.

Investment and Strategic Ties in the Gulf

Beyond trade, the pact carries strategic weight for India in the Middle East. Indian investments in Oman exceed USD 7.5 billion, concentrated in zones like Sohar and Salalah. The two nations maintain over 6,000 joint ventures.

Cumulative outward direct investment from India to Oman stands at USD 675 million, while FDI equity inflow from Oman to India from April 2000 to March 2025 totals USD 610.08 million.

The CEPA follows the model of India's UAE Free Trade Agreement, emphasising reduced regulatory barriers. This includes potential fast-track approvals for Indian pharmaceutical products.

Rising Bilateral Trade Figures

Bilateral trade between India and Oman grew from USD 8.947 billion in FY 2023-2024 to USD 10.613 billion in FY 2024-25, according to ANI reports. In another reference, trade stood at about USD 10.5 billion in 2024-25.

Part of India's Expanding FTA Network

The India-Oman CEPA joins India's recent trade agreements. These include the 2025 Comprehensive Economic and Trade Agreement with the United Kingdom, the 2024 agreement with the European Free Trade Association (Switzerland, Norway, Iceland and Liechtenstein), the 2022 Economic Cooperation and Trade Agreement with Australia, the 2022 CEPA with the UAE and the 2021 pact with Mauritius.

This agreement marks Oman's second FTA with an individual country and its first in nearly 20 years.

Leadership Remarks on the Pact

At the Oman-India Business Summit in Muscat, Minister of Commerce Piyush Goyal described the CEPA as the "culmination of our shared vision and dedicated efforts to build a mutually prosperous future for our people."

The agreement, expected to take effect after a few months, supports trade diversification and supply chain resilience for both countries.

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